IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_12370.html

Public Insurance and Demand for Private Healthcare

Author

Listed:
  • Titir Bhattacharya
  • Tanika Chakraborty
  • Prabal De

Abstract

Establishment of public–private partnerships is an emerging model in health care delivery. This study evaluates a pioneering social health insurance program in India that enables eligible households to access private hospitals for tertiary care services free of cost, but does not build more facilities. Leveraging policy discontinuities at state borders, we identify the program’s causal effects on utilization of private facilities and associated out-of-pocket expenditures. The results indicate a pronounced substitution effect induced by relative price changes: the program substantially increases the incidence of deliveries in private hospitals while significantly reducing out-of-pocket spending. However, we find no statistically significant effects on fertility or a key health outcome, infant mortality.

Suggested Citation

  • Titir Bhattacharya & Tanika Chakraborty & Prabal De, 2025. "Public Insurance and Demand for Private Healthcare," CESifo Working Paper Series 12370, CESifo.
    • Handle: RePEc:ces:ceswps:_12370
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/cesifo1_wp12370.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Powell-Jackson, Timothy & Mazumdar, Sumit & Mills, Anne, 2015. "Financial incentives in health: New evidence from India's Janani Suraksha Yojana," Journal of Health Economics, Elsevier, vol. 43(C), pages 154-169.
    2. Janet Currie & Jonathan Gruber, 1996. "Health Insurance Eligibility, Utilization of Medical Care, and Child Health," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 431-466.
    3. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
    4. Beatrix Eugster & Rafael Lalive & Andreas Steinhauer & Josef Zweimüller, 2011. "The Demand for Social Insurance: Does Culture Matter?," Economic Journal, Royal Economic Society, vol. 121(556), pages 413-448, November.
    5. Tanika Chakraborty & Sukkoo Kim, 2010. "Kinship institutions and sex ratios in India," Demography, Springer;Population Association of America (PAA), vol. 47(4), pages 989-1012, November.
    6. Karthik Muralidharan & Nishith Prakash, 2017. "Cycling to School: Increasing Secondary School Enrollment for Girls in India," American Economic Journal: Applied Economics, American Economic Association, vol. 9(3), pages 321-350, July.
    7. Laura R. Wherry & Sarah Miller & Robert Kaestner & Bruce D. Meyer, 2018. "Childhood Medicaid Coverage and Later-Life Health Care Utilization," The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 287-302, May.
    8. Mavalankar, D.V. & Rosenfield, A., 2005. "Maternal mortalily in resource-poor settings: Policy barriers to care," American Journal of Public Health, American Public Health Association, vol. 95(2), pages 200-203.
    9. Christopher Boone & Arindrajit Dube & Lucas Goodman & Ethan Kaplan, 2021. "Unemployment Insurance Generosity and Aggregate Employment," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 58-99, May.
    10. Sisir Debnath & Tarun Jain, 2020. "Social connections and tertiary health‐care utilization," Health Economics, John Wiley & Sons, Ltd., vol. 29(4), pages 464-474, April.
    11. Jessamyn Schaller, 2016. "Booms, Busts, and Fertility: Testing the Becker Model Using Gender-Specific Labor Demand," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 1-29.
    12. Janet Currie & Valentina Duque, 2019. "Medicaid: What Does It Do, and Can We Do It Better?," The ANNALS of the American Academy of Political and Social Science, , vol. 686(1), pages 148-179, November.
    13. Prabal K. De & Laxman Timilsina, 2020. "Cash‐based maternal health interventions can improve childhood vaccination—Evidence from India," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1202-1219, October.
    14. Levine, David & Polimeni, Rachel & Ramage, Ian, 2016. "Insuring health or insuring wealth? An experimental evaluation of health insurance in rural Cambodia," Journal of Development Economics, Elsevier, vol. 119(C), pages 1-15.
    15. Olena Y. Nizalova & Maria Vyshnya, 2010. "Evaluation of the impact of the Mother and Infant Health Project in Ukraine," Health Economics, John Wiley & Sons, Ltd., vol. 19(S1), pages 107-125, September.
    16. Pascaline Dupas & Radhika Jain, 2024. "Women Left Behind: Gender Disparities in Utilization of Government Health Insurance in India," American Economic Review, American Economic Association, vol. 114(10), pages 3345-3385, October.
    17. Grossman, Daniel, 2019. "The unintended effects of place based programs: Fertility and health effects of urban empowerment zones," Journal of Health Economics, Elsevier, vol. 63(C), pages 114-127.
    18. Carol Propper, 2001. "Expenditure on healthcare in the UK: a review of the issues," Fiscal Studies, Institute for Fiscal Studies, vol. 22(2), pages 151-183, June.
    19. Karen Smith Conway & Andrea Kutinova, 2006. "Maternal health: does prenatal care make a difference?," Health Economics, John Wiley & Sons, Ltd., vol. 15(5), pages 461-488, May.
    20. Arindrajit Dube & T. William Lester & Michael Reich, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 945-964, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anaka Aiyar & Naveen Sunder, 2024. "Health insurance and child mortality: Evidence from India," Health Economics, John Wiley & Sons, Ltd., vol. 33(5), pages 870-893, May.
    2. Victoria Perez & Joseph A. Benitez & Justin Ross, 2021. "Too small to fail: The role of Medicaid in mitigating pandemic‐related fiscal strain on local governments," Public Budgeting & Finance, Wiley Blackwell, vol. 41(3), pages 74-97, September.
    3. Hull, Marie & Yan, Ji, 2024. "The impact of children's access to public health insurance on their cognitive development and behavior," Journal of Health Economics, Elsevier, vol. 98(C).
    4. O'Donnell, Owen, 2024. "Health and health system effects on poverty: A narrative review of global evidence," Health Policy, Elsevier, vol. 142(C).
    5. Gregori Galofré-Vilà & Martin McKee & David Stuckler, 2022. "Quantifying the mortality impact of the 1935 old-age assistance," European Review of Economic History, European Historical Economics Society, vol. 26(1), pages 62-77.
    6. Steven Dieterle & Otávio Bartalotti & Quentin Brummet, 2020. "Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement-Error-Corrected Regression Discontinuity Approach," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 84-114, May.
    7. Malani, Anup & Kinnan, Cynthia & Conti, Gabriella & Imai, Kosuke & Miller, Morgen & Swaminathan, Shailender & Voena, Alessandra & Woda, Bartek, 2024. "Evaluating and pricing health insurance in lower-income countries: A field experiment in India," CEPR Discussion Papers 19326, C.E.P.R. Discussion Papers.
    8. Bhalotra, Sonia & Fernandez, Manuel, 2021. "The Right to Health and the Health Effects of Denials," QAPEC Discussion Papers 11, Quantitative and Analytical Political Economy Research Centre.
    9. Qian Chen & Christoffer Koch & Padma Sharma & Gary Richardson, 2020. "Payments Crises and Consequences," NBER Working Papers 27733, National Bureau of Economic Research, Inc.
    10. David Slichter, 2023. "The employment effects of the minimum wage: A selection ratio approach to measuring treatment effects," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(3), pages 334-357, April.
    11. Kumar, Santosh & Prakash, Nishith, 2017. "Effect of political decentralization and female leadership on institutional births and child mortality in rural Bihar, India," Social Science & Medicine, Elsevier, vol. 185(C), pages 171-178.
    12. Toshiaki Iizuka & Hitoshi Shigeoka, 2018. "Free for Children? Patient Cost-sharing and Healthcare Utilization," NBER Working Papers 25306, National Bureau of Economic Research, Inc.
    13. Laura R. Wherry & Bruce D. Meyer, 2016. "Saving Teens: Using a Policy Discontinuity to Estimate the Effects of Medicaid Eligibility," Journal of Human Resources, University of Wisconsin Press, vol. 51(3), pages 556-588.
    14. Yavuz Arslan & Ahmet Degerli & Gazi Kabas, 2025. "Unintended Consequences of Unemployment Insurance Benefits: The Role of Banks," Management Science, INFORMS, vol. 71(4), pages 2847-2866, April.
    15. repec:osf:socarx:2mq5v_v1 is not listed on IDEAS
    16. Guldi, Melanie & Hamersma, Sarah, 2023. "The effects of pregnancy-related Medicaid expansions on maternal, infant, and child health," Journal of Health Economics, Elsevier, vol. 87(C).
    17. David Gilchrist & Thomas Emery & Nuno Garoupa & Rok Spruk, 2023. "Synthetic Control Method: A tool for comparative case studies in economic history," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 409-445, April.
    18. Philip Hochuli & Christian P. R. Schmid, 2025. "Insurance Expansion During Pregnancy," Health Economics, John Wiley & Sons, Ltd., vol. 34(9), pages 1595-1613, September.
    19. Noghanibehambari, Hamid, 2022. "Intergenerational health effects of Medicaid," Economics & Human Biology, Elsevier, vol. 45(C).
    20. Kekre, Aishwarya & Mahajan, Kanika, 2023. "Maternity support and child health: Unintended gendered effects," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 880-898.
    21. Klein, Alexander & Crafts, Nicholas, 2023. "Unconditional Convergence in Manufacturing Productivity across U.S. States: What the Long-Run Data Show," CEPR Discussion Papers 18065, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_12370. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.